KUSKOP unveils SCALE 2027 plan to address structural challenges facing Malaysian MSMEs

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SCALE 2027 for Malaysian MSMEs

Highlights

KUSKOP launches the SCALE 2027 Plan with five strategic priorities, including SME Redefinition, Cash Flow Protection, AI for MSMEs, Local Content Requirement and Easing MSME Financing.
MSME support under Budget 2027 amounts to RM67.9 billion, including RM57 billion for loan facilities and guarantees, up from RM50 billion in 2026.
As of 30 September 2026, KUSKOP had disbursed RM10.5 billion to around 295,000 entrepreneurs and MSMEs, targeting a total of RM15 billion this year.

This article was translated from the original. Read the original version by our correspondent here.

Plan priorities and reform direction

As reported by The Edge Malaysia, the new plan was announced by Minister of Entrepreneur and Cooperatives Development Steven Sim at the SAMENTA 2026 SME CEO Forum. It sets out five strategic priorities reflected in the acronym SCALE: SME Redefinition, Cash Flow Protection, AI for MSMEs, Local Content Requirement and Easing MSME Financing.

Sim said KUSKOP’s focus in 2026 is to accelerate productivity, reduce bureaucracy, improve access to capital and promote market access through its ABCD strategy. He said the SCALE 2027 Action Plan complements the existing approach by focusing on longer-term structural reforms so that MSMEs can grow, compete and move up the value chain.

For the SME redefinition component, the ministry will review Malaysia’s existing definition, which has been in use since 2013, to ensure it reflects changes in the business landscape and international best practices. Under cash flow protection, KUSKOP is examining measures to protect MSMEs from late payments and prolonged payment withholding, in an effort to strengthen small companies’ financial resilience.

For AI adoption, the ministry is prioritising support to help MSMEs adopt the technology across various areas of their operations to boost productivity and create greater value. Sim said AI could help businesses increase output without relying solely on longer working hours, supporting Malaysia’s shift from a “Made in Malaysia” to a “Made by Malaysia” growth model.

Under the local content requirement priority, KUSKOP is exploring requirements to ensure Malaysian MSMEs benefit more directly from domestic economic growth and major investments, including foreign direct investment. The ministry is also considering appropriate guidelines and, where necessary, legislative measures to strengthen the participation of local MSMEs in supply chains and investment projects.

Budget 2027 support and its impact on MSMEs

Under the priority of easing MSME financing, KUSKOP will work with relevant ministries, financial institutions and Bank Negara Malaysia to address outdated regulations and other barriers that restrict access to financing. The ministry is also exploring ways to expand access to alternative capital-raising mechanisms beyond traditional financial institutions.

Sim also urged industry players to make the most of opportunities under Budget 2027 and prepare their businesses for the next phase of growth. In a separate statement, KUSKOP said total MSME-related support under Budget 2027 amounts to RM67.9 billion, covering financing, guarantees, grants, training, resources and programmes.

Of that amount, RM57 billion is allocated to loan facilities and financing guarantees, up from RM50 billion in 2026. As of 30 September 2026, KUSKOP had disbursed RM10.5 billion to around 295,000 entrepreneurs and MSMEs nationwide, against a target of RM15 billion for this year.

SME Corp Malaysia’s Sinar Programme , which we previously reported on, was introduced as a support channel for MSMEs affected by supply chain disruptions and rising operating costs, with 1,204 enterprises benefiting as of 30 September. The article also details the breakdown of financing and incentives under Sinar, while placing the RM67.9 billion in Budget 2027 support for MSME development in context, covering financing, automation, market access and human capital.

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